Viacom 1994JULY, 1994: After a bitter battle with BarryDiller, Viacom acquires Paramount for $10billion, 25% more than originally planned.SEPTEMBER, 1994 $8.4 billion Blockbustermerger is finished. Viacom immediately writesdown about $318 million of tape inventory.
Viacom 1994FEBRUARY, 1995: Viacom is now the No.2entertainment company in the world. Thanks toaccounting changes, Blockbuster reports huge gainsin cash flow.SEPTEMBER, 1995: Viacom narrowly dodges havingto issue millions of new shares to compensateformer Blockbuster holders.NOVEMBER, 1995: Blockbuster founder WayneHuizenga resigns from Viacom board.
Disney 1995In the second-largest corporate takeoverever, the Walt Disney Company movedyesterday to create the worlds most powerfulmedia and entertainment company, announcingthat it would acquire Capital Cities/ ABC Inc. for$19 billion.
Time Warner 1995Ending a tumultuous five-week courtship, TimeWarner Inc. and Turner Broadcasting Systemsaid yesterday that they would merge theirsprawling operations, reinforcing Time Warnersposition as the worlds largest communicationscompany.
Seagram 1995Seagram in April 1995 sold its holdings in DuPont, receiving about $11 billion in the process.The proceeds were almost immediatelyreinvested when Seagram later that monthacquired 80% (later increased to 84%) of MCA,Inc. from Matsushita Electric IndustrialCompany, Ltd. for $5.7 billion. MCA--whosename Seagram changed to Universal Studios.
Westinghouse 1995The Westinghouse Electric Corporation, an earlybroadcasting pioneer, said yesterday that it hadagreed to pay $5.4 billion for CBS Inc., the lastindependent television network and once thecrown jewel of broadcasting.
Seagram 1998MONTREAL, November 4, 1998 – The SeagramCompany Ltd. announced today that it hascommenced its previously announced offer forall issued shares of PolyGram N.V. In theoffer, each PolyGram shareholder may elect toreceive for each PolyGram share NLG 115 in cashor Seagram shares based on an exchange ratioof 1.3772 Seagram shares for each PolyGramshare.
Viacom 1999Viacom Inc. and CBS Corp. announced ablockbuster $35.6 billion merger Tuesday, amove which is designed to bring the network ofDan Rather in touch with the MTV generation.
Vivendi 2000French group "Vivendi Universal" has won thebid for the purchase of 35% of Maroc-Telecomcapital for $ 2.33 billion (23.34 billion DH), it wasofficially announced on Thursday.
AT&T 1998Hoping to return to the local telephone marketand become a premier Internet player, AT&TCorp. unveiled plans Wednesday to acquirecable giant Tele-Communications Inc. in ablockbuster $48 billion deal.
AOL 2000Goodwill is simply the difference between theprice paid for a company during an acquisitionand the net assets of the acquired company. The$128 billion of goodwill in this case was createdwhen AOL and Time Warner merged in 2000.
Comcast 2002Comcast Corp yesterday became the worldslargest cable company, following its merger withAT&T Broadband, which was spun off fromparent AT&T Corp yesterday as part of the$29.2bn deal. The new Comcast Corp has 21.4million cable TV subscribers and is worth anestimated $60bn.
General Electric/NBCThe conglomerate pays the remaining $3.8billion it owed under a $5.8-billion deal for theFrench firms 20% ownership of NBC Universal.
SonyThe planned merger between music giants Sonyand Bertelsmann (BMG) has been given thegreen light by the European Union, with nostrings attached.The proposed marriage will leave four industrymajors with about 80% of the world musicmarket.
Date Acquiring Firm Acquired firm (new Price (US $ billions) Strategic Motivation name in brackets)1994 Viacom Paramount Communications 8.0 Conglomeration across publishing, film, broadcasting, cable, theme parks.1994 Viacom Blockbuster 8.5 Distribution control.1995 Disney Capital Cities/ABC 19.0 Vertical integration and control of content creation.1995 Time Warner Turner Broadcasting 7.4 Vertical integration and conglomeration /synergy.1995 Seagram MCA (Universal) 5.7 General conglomerate moves into broadcasting.1995 Westinghouse CBS 5.4 General conglomerate moves into broadcasting.1999 Carlton United 8.0 Merger of European media groups.1998 Seagram PolyGram 10.6 Recording market share plus European film interests.1999 Viacom CBS 22 Media conglomerate consolidates broadcasting power.2000 Vivendi Seagram/Universal 35 Very diversified European leisure conglomerate diversifies further.1998 AT&T TCI (Including Liberty Media) 48 Telecoms and media convergence.2000 AOL Time Warner (AOL Time 128.0 Internet service provider Warner) merges with media conglomerate.2002 Comcast AT&T Broadband 47.5 Cable company expands via acquisition.
Vertical & Horizontal IntegrationVertical integration is the process in which several steps in the production and/or distributionof a product or service are controlled by a single company or entity, in order to increase thatcompany’s or entity’s power in the marketplace.Much more common and simpler than vertical integration, Horizontal integration (alsoknown as lateral integration) simply means a strategy to increase your market share by takingover a similar company. This take over / merger / buyout can be done in the same geographyor probably in other countries to increase your reach.
Vertical Integration ExampleAn example of vertical integration, amongcontemporary entertainment firms, can be found withmajor record labels owning the distributors of theirphysical music. UMG owns UMGD and independentdistributor Fontana, Sony owns Sony Music Distributionand independent distributor R.E.D., Warner MusicGroup owns WEA and indie distributor ADA, and EMIowns EMI distribution.
Horizontal Integration ExampleDisney, which creates movies and televisionshows, uses the characters to create toys andmarket other products to kids, etc. would be anexample of horizontal integration. (Note thatDisney uses other companies to do some of thework on the movies and TV programs, tomanufacture the toys, etc and so is not verticallyintegrated.)
Public Service Broadcasting & Ofcom
Informing, educating & Entertaining Since 2009Lord Reith was a Scottish broadcasting executive whoestablished the tradition of independent public servicebroadcasting in the United Kingdom. In 1922 he wasemployed by the BBC as its General Manager; in 1923 hebecame its Managing Director and in 1927 he wasemployed as the Director-General of the BritishBroadcasting Corporation created under a Royal Charter.His concept of broadcasting as a way of educating themasses marked for a long time the BBC and similarorganizations around the world.Reith summarized the BBCs purpose in three words:educate, inform, entertain; this remains part of theorganisations mission statement to this day.
Lord Reith (1889-1971) Founder of the BBC
Public Service Broadcasting (PSB)The United Kingdom has a strong tradition ofpublic service broadcasting. In addition to theBBC, established in 1922, there is also Channel4, a commercial public service broadcaster, andS4C, a Welsh-language broadcaster in Wales.Furthermore, the two commercial analoguebroadcasters ITV and Channel 5 also havesignificant public service obligations imposed aspart of their licence to broadcast.
Cross-media ownershipConcentration of media ownership (also knownas media consolidation or media convergence) isa process whereby progressively fewerindividuals or organizations control increasingshares of the mass media. Contemporaryresearch demonstrates increasing levels ofconsolidation, with many media industriesalready highly concentrated and dominated by avery small number of firms
DiversificationBased on the undisputed merits of social,political and cultural pluralism, diversity.And variety in the media is desirable ends inthemselves.
Digital broadcastingDigital broadcasting is the practice of usingdigital data rather than analogue waveforms tocarry broadcasts over television channels orassigned radio frequency bands. It is becomingincreasingly popular for television usage(especially satellite television) but is having aslower adoption rate for radio.
Satellite broadcastingSatellite television is television programming delivered bythe means of communications satellite and received byan outdoor antenna, usually a parabolic reflectorgenerally referred to as a satellite dish, and as far ashousehold usage is concerned, a satellite receiver eitherin the form of an external set-top box or a satellite tunermodule built into a TV set. Satellite TV tuners are alsoavailable as a card or a USB peripheral to be attached to apersonal computer. In many areas of the world satellitetelevision provides a wide range of channels andservices, often to areas that are not serviced by terrestrialor cable providers.
Product Diversity and Profitability
Garnham Says...“…risk derives from the fact that audiences use cultural commodities in highly volatile and unpredictable ways, often in order to express that they are different from each other”
Our Own HabitsNearly 30,000 albums were released in the USA in 1998, of which fewer than 2% sold more than 50,000 copies.Due to such high popularity in music during this period (perhaps even more so now), people are more inclined to buy music by artists and bands that are already well recognised. This means when new musicians with new styles of music come into the scene, they may find it harder to gain recognition if it doesn’t match a large audiences expectations.
Recent MusicHowever, during recent times. People have began to like and listen to styles of music to differentiate themselves from other people. Ranging from dubstep to the re-introduction of reggae. Due to this, it means that producing new music for a profit can become harder; ‘risky business’.
FilmsSimilar to music, films that get released are regualrly judged on previous works by either the actors, directors or sequels. A good example is the release of the new James Bond film, ‘Skyfall’. A large majority of viewers of the film will have seen the film due to the previous Bond films and possibly the actor. Not to mention the fact it was released on Bond’s 50th anniversary. Seemingly a very ‘unrisky’ film. However, taking away the anniversary and people involved with the film, its success would have been completely different.
Minimising RisksHorizontal integration within media buys up competition, whereas vertical integration lowers production costs. Multisector and multimedia integration allows for cross- promotion.Larger companies are able to spread risks in way that smaller companies are unable to do.
PRIVACY LAWPrivacy in English law is a rapidly developing area of English law thatconsiders in what situations an individual has a legal right toinformational privacy, that is to say the protection of personal (orprivate) information from misuse or unauthorized disclosure. Privacylaw is distinct from those laws such as trespass or assault that aredesigned to protect physical privacy. Such laws are generallyconsidered as part of criminal law or the law of tort. Historically,English common law has recognized no general right or tort of privacy,and was offered only limited protection through the doctrine of breachof confidence and a "piecemeal" collection of related legislation ontopics like harassment and data protection. The introduction of theHuman Rights Act 1998 incorporated into English law the EuropeanConvention on Human Rights. Article 8.1 of the ECHR provided anexplicit right to respect for a private life for the first time within Englishlaw. The Convention also requires the judiciary to "have regard" to theConvention in developing the common law.
The European Convention on Human Rights (ECHR)ECHR is an international treaty to protect humanrights and fundamental freedoms in Europe.Drafted in 1950 by the then newly formedCouncil of Europe, the convention entered intoforce on 3 September 1953. All Council ofEurope member states are party to theConvention and new members are expected toratify the convention at the earliest opportunity.
Licensing act 2003 and LAThey licensing act 2003 and LA have beenprepared by the Department for Culture, Mediaand Sport in order to assist the reader of theAct. In April 2000 the Government published anact on reforming alcohol and entertainmentlicensing set out proposals for modernizing andintegrating the alcohol, public entertainment,theatre, cinema, night café and late nightrefreshment house licensing schemes in bothEngland and Wales.
Official Secrets Act 1989Secrets 1 – Security and IntelligenceAn offence of disclosing information, documents or other articles relating to security or intelligence.Secrets 2 – DefenceAn offence of disclosing information, documents or other articles relating to defence. This sectionapplies only to crown servants and government contractors.Secrets 3 – International relationsAn offence of disclosing information, documents or other articles relating to international relations. Thissection applies only to crown servants and government contractors.Section 4 - Crime and special investigation powersThis section relates to disclosure of information which would assist a criminal or the commission of acrime. This section applies only to crown servants and government contractors.Section 5 - Information resulting from unauthorised disclosures or entrusted in confidenceThis section relates to further disclosure of information, documents or other articles protected fromdisclosure by the preceding sections of the Act. It allows, for example, the prosecution of newspapers orjournalists who publish secret information leaked to them by a crown servant in contravention ofsection 3. This section applies to everyone.
Libel LawThere are two versions of defamation, libel andslander. Libel is when the defamation is writtendown (including email, bulletin boards andwebsites), and slander is when the incidentrelates to words spoken. In the UK, if someonethinks that what you wrote about them is eitherdefamatory or damaging, the onus will beentirely on you to prove that your comments aretrue in court.
The Race Relations ActThe Race Relations Act 1976 was established by theParliament of the United Kingdom to preventdiscrimination on the grounds of race.Items that are covered include discrimination on thegrounds of race, colour, nationality, ethnic and nationalorigin in the fields of employment, the provision of goodsand services, education and public functions.The Act also established the Commission for RacialEquality with a view to review the legislation, which wasput in place to make sure the Act rules were followed.
The Broadcasting Act 1990This broadcasting act has to some extent been superseded by the Governments White Paper on Communications, because anything takenfrom that paper will be turned into a new Act of Parliament. However, this Act began the first steps to deregulation in British Broadcastingand reversed restrictions imposed on ownership of ITV franchises. The main points of the 1990 Act were:• This act required all ITV franchises to be put up for sale and to be awarded partly on financial grounds.• New ITV regional franchises mandated to give 25% of their production to independent producers.• ITV network centre established to commission programmes from the franchise holders on to the national ITV network.• Independent Television Commission set up to regulate all TV services in the UK, with the exception of the BBC.• For first time Channel4 to sell own advertising and ITV monopoly on advertising sales was lost.• Channel 5 was last conventional terrestrial TV channel to set up in 1997 before digital explosion, to provide same strand of programming at the same time every day, each week.• TV licence is a tax on all owners of a TV set. Fee set by government and to be renewed by an Act of Parliament.• Corporations right to be funded by licence fee renewed, but situation insecure.• BBC set up internal market as Producer Choice, where producers must also be managers and shop around for cheapest facilities rather than accept those providing by corporation itself.• Discusses different ways of paying for TV viewing as things are changing, ie. pay per view and subscription.• The Broadcasting Act 1990 is a law of the British parliament, often regarded by both its supporters and its critics as a quintessential example of Thatcherism. The aim of the Act was to reform the entire structure of British broadcasting; British television, in particular, had earlier been described by
Effects of the ActAn effect of this Act was that, in the letter of the law, the television orradio companies rather than the regulator became the broadcasters,as had been the case in the early (1955-1964) era of the IndependentTelevision Authority when it had fewer regulatory powers than itwould later assume.In TelevisionIn television, the Act allowed for the creation of a fifth analogueterrestrial television channel in the UK, which turned out to beChannel 5, and the growth of multichannel satellite television. It alsostipulated that the BBC, which had previously produced the vastmajority of its television programming in-house, was now obliged tosource at least 25% of its output from independent productioncompanies.